The Interpublic Group of Companies, Inc. (NYSE:IPG) Q1 2018 Earnings Conference Call Transcript
Apr 27, 2018 • 08:30 am ET
Good morning, and welcome to The Interpublic Group First Quarter 2018 Conference Call. All parties are in a listen-only mode until the question-and-answer portion. (Operator Instructions) This conference is being recorded. If you have any objections, you may disconnect at this time.
I would like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin. Thank you.
Jerome J. Leshne
Thank you. Good morning. Thank you for joining us. We have posted our earnings release and our slide presentation on our website interpublic.com. This morning, we are joined by Michael Roth and Frank Mergenthaler. We will begin with prepared remarks to be followed by Q&A. We plan to conclude before market open at 9:30 A.M. Eastern.
During this call, we will refer to forward-looking statements about our company. These are subject to the uncertainties in the cautionary statement that is included in our earnings release and the slide presentation and further detailed in our 10-Q and other filings with the SEC. We will also refer to certain non-GAAP measures. We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow for greater transparency in the review of our financial and operating performance.
At this point, it is my pleasure to turn things over to Michael Roth.
Michael I. Roth
Thank you, Jerry. And thank you all for joining us this morning as we review our results for the quarter. I'll start by covering highlights of our performance. Frank will then provide additional detail, and I'll conclude with an update on our agencies to be followed by our Q&A.
We're pleased to report another quarter of solid revenue and operating profit growth. Our net revenue organic growth was 3.6% in Q1 and operating income exceeded 12% from a year-ago. Growth in the U.S. was notably strong at 4.3%, while international growth was 2.6%, paced by strong results in the UK and LatAm.
Our increases were driven by a wide range of disciplines, including media, our digital specialists, our creative-led integrated agencies and our events and sports marketing agencies. This continues to underscore the strength and competitiveness of our offerings across the portfolio and is an encouraging start to the year.
Q1 operating profit was $39 million compared with $35 million last year, which reflects both our topline growth and the effectiveness of our ongoing disciplines around expenses. As you know, our first quarter is seasonally small in terms of revenue, while total costs are distributed fairly evenly through the year. That said, our performance is indicative of solid progress toward our full-year financial targets.
Returning to the topline, our growth reflects contributions from a wide range of our agencies, most notably Mediabrands, Huge, McCann, FCB, MullenLowe Group, Octagon, Jack Morton and Deutsch. We saw our increases from both new business wins and existing client spend. In terms of client sectors, we were led by increases in the financial services, healthcare and auto and transportation.
Our capital structure continued to be a source of value creation. As